LONDON: Gold fell over 1% on Friday due to a stronger dollar and profit-taking, although lingering geopolitical and economic uncertainties, and US Federal Reserve rate cut prospects kept bullion on track for a third consecutive weekly rise.
Spot gold was down 1.4% at $3,001.03 an ounce at 10:17 a.m. ET (1457 GMT). US gold futures fell 1.2% to $3,007.80. Bullion has gained 0.7% so far this week.
Gold, traditionally viewed as a safe-haven investment during times of geopolitical and economic uncertainty, and typically thriving in a low-interest rate environment, has hit 16 record highs this year, reaching an all-time peak of $3,057.21 per ounce on Thursday. “The market is taking a bit of a breather.
There’s some profit-taking at these levels and also the dollar is stronger today,“ said Marex analyst Edward Meir. The US dollar rose 0.2%, hitting a two-week high and making greenback-priced bullion more expensive for overseas buyers. “Ongoing safe-haven demand, both based on trade concerns and geopolitical risks, continues to be the primary driving force,” said Peter Grant, vice president and senior metals strategist at Zaner Metals.
US President Donald Trump still intends for new reciprocal tariff rates to take effect on April 2. The Fed held its benchmark interest rate steady on Wednesday as widely expected, but indicated two quarter-percentage-point cuts before the end of the year.
Traders are pricing in 71 basis points of easing this year from the Fed with at least two rate reductions of 25 bps each, with a cut in July fully priced in, LSEG data showed.
Israel announced an escalation in air, land, and sea strikes against Hamas in Gaza to pressure the release of remaining hostages, effectively abandoning a two-month ceasefire and launching an all-out air and ground campaign against the dominant Palestinian militant group.
Spot silver slid 2.2% to $32.80 an ounce, platinum lost 1.3% to $972.25 and palladium was steady at $952.04. All three metals were poised for weekly losses.
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